BT 2004 Annual Report Download - page 48

Corporate social responsibility (CSR)
Our challenge is to manage social, ethical and
environmental issues in ways that grow shareholder
value and help make sustainable development happen.
The Dow Jones Sustainability Indexes rank
companies for their success in meeting this challenge.
During the 2004 financial year, BT was ranked as the
top telecommunications company in the Dow Jones
Sustainability Index for the third year running.
We also hold the Queen’s Award for Enterprise in
recognition of our contribution to sustainable
development.
This section of the report, together with the broad
statement on social, environmental and ethical matters
included in the section on Corporate governance,
provides information in response to the Association of
British Insurers’ disclosure guidelines on social
responsibility.
More detailed disclosures on BT’s implementation
of social, ethical and environmental policies and
procedures are available online in our independently-
verified social and environmental report, which has
been prepared in accordance with the 2002 Global
Reporting Initiative (GRI) sustainability reporting
guidelines.
CSR governance
The Board is kept informed of BT’s main CSR risks and
opportunities and any new developments which may
impact on its duties and reviews annually our CSR
strategy. In addition, social, ethical and environmental
matters have been incorporated into the directors’
induction programme.
A Board committee – the Community Support
Committee – oversees community, charitable and arts
expenditure and establishes the strategy for
maximising our contribution to society. The
committee, chaired by Sir Christopher Bland, consists
of representatives from BT businesses, two non-
executive directors and two external independent
members, who have a reputation for excellence in this
field.
An executive committee, the Corporate Social
Responsibility Steering Group (CSRSG), oversees the
implementation of our CSR programme. This includes
risk assessment, target and objective setting,
ISO14001 certification – the international standard for
environmental management systems – and public
accountability.
The CSRSG consists of CSR champions nominated
by the lines of business and six support functions
(human resources, corporate governance, health and
safety, finance, communications and procurement).
The CSRSG is chaired by BT’s overall CSR
champion, Alison Ritchie, Chief Broadband Officer and
a member of the Operating Committee. It is supported
by advice from an independent panel of CSR experts.
To ensure that CSR is embedded into BT’s
commercial operations, we undertake CSR ‘‘health
checks’’ of our main commercial initiatives.
These health checks identify specific social,
economic and environmental impacts (both positive
and negative) and particular CSR risks and
opportunities. A report is then compiled, including
recommended actions.
We have important relationships with a wide range
of stakeholders, including employees, customers and
suppliers. We engage with these stakeholders in a
number of ways, including consumer liaison panels, an
annual employee survey and a supplier relationship
management programme.
We also employ a number of CSR experts who
investigate long-term societal trends, identify potential
issues that might affect the business and support BT’s
commercial activities.
We have identified 11 non-financial KPIs (key
performance indicators) in this context to provide a
quick overview of BT’s social and environmental
performance.
These KPIs have also been used to establish ten
strategic social and environmental targets and are
published in our social and environmental report.
Social, environmental and ethical risks
During the 2004 financial year, we developed a
separate CSR risk register that sets out our important
social, ethical and environmental risks. It identifies the
following risks as the most significant in the context of
CSR:
&supply chain working conditions
&health and safety
&climate change
&diversity
&geography of jobs (‘‘offshoring’’)
&breach of the code of business ethics.
Each of these CSR risks has a risk owner and
mitigation strategy in place (more detail can be found
in our social and environmental report).
CSR business opportunities
Following a detailed statistical analysis of customer
opinion data going back up to 80 months and based
on tens of thousands of interviews, we have been able
to show that a 1% improvement in the public’s
perception of our CSR activities results in a 0.1%
increase in our retail customer satisfaction figures.
This is a critical correlation and shows how
important it is not only to protect our reputation
through appropriate risk management activities, but
also to enhance it through our community activities.
Long-term sustainability trends are creating
market opportunities for us, such as the use of
teleconferencing and flexible working to reduce the
need to travel and provide more flexible lifestyles.
Increasingly, BT has to address social and
environmental matters when bidding for business. In
the 2004 financial year, bids to the value of almost
£900 million required us to demonstrate expertise in
managing these issues.
Environment
BT is one of the largest consumers of industrial and
commercial electricity in the UK, and the growth of
broadband is likely to increase our electricity use.
However, during the 2004 financial year, a £675,000
investment in our energy conservation programme
BT Annual Report and Form 20-F 200447 Operating and financial review
Our commitment to society